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The regulator is working to encourage a greater collaboration and coordination among key participants to toughen the industry's defences against the threat of fraud.

It said is was important mortgage brokers were vigilant in ensuring they had sufficient controls in place to prevent their own firm being used for committing fraud.

As part of this move, the FSA today (28 August) published guidance for advisers on the subject of mortgage fraud.

This includes looking our for suspected fraudulent documentation, false or doubts about income and employment details or links and trends identified between clients.

The City watchdog said advisers must realise they are responsible for reporting any wider suspicions of fraudulent activity, or examples of poor practices resulting in potential fraud that have come to their notice.

Philip Robinson, director of financial crime for the FSA, said: "Mortgage fraudsters tarnish the reputation of the industry as a whole, and there is no place in the market for firms who are – or have been – knowingly involved in mortgage fraud.

"Our work will increase our effectiveness in identifying and tackling such firms. If we find evidence of fraudulent activity at a firm we visit, it can expect to be subject to immediate and intensive action."